Enter the trustbusters, led by Senator John Sherman, author of the 1890 Sherman Act, America’s first antitrust law. In arguing for his bill, Sherman said to the Senate: “If we will not endure a King as a political power we should not endure a King over the production, transportation, and sale of the necessaries of life. If we would not submit to an emperor we should not submit to an autocrat of trade with power to prevent competition and to fix the price of any commodity.”
In other words, when a company gained too much power, it became the same kind of kingly authority that the colonists overthrew in 1776. Government “by the people, of the people, and for the people” was incompatible with concentrated corporate power from companies so large that they were able to determine how people lived their lives, made their incomes, and structured their cities and towns.
Break up big tech. Apple, Google, Amazon, Microsoft, Facebook – they need to be chopped up into smaller parts that need to compete with one another. The amount of life this will breathe into the economy, as well as the burst of innovation that it will cause, will do more for people’s lives than a trillion nonsense trickle-down policies that favour the rich and powerful.
But how do you propose “breaking up” the Internet companies?
Back in the day, with telecom and petrol for example, things had physically separate locations. So you could divide “East Coast Rail” and “West Cost Rail” without harming neither the company nor the communities they served.
But how do you break an entity like Google? Physical location obviously will not work. Separating by product markets is also problematic.
Can you remove News on its on entity? Not even having ads (most of the time) the product needs financial backing of Search just to exist.
What about larger ones like Android? Yes, they are run mostly separately. And this is a requirement of having access to partner code. (Can’t have Samsung next gen specs leak into Pixel, so there are really good boundaries). But the “core” operating system itself, being open source, cannot stand on its own. Spin off Android, and see it replaced with proprietary and incompatible forks really fast (or die a slow death like all other projects: https://itsfoss.com/open-source-alternatives-android/)
The problem is, any cut to the current system is going to harm consumers. Or to be fair, most cuts people are going for.
Instagram / Facebook, YouTube / Google, or even Office / Windows might be more realistic. But even those would be extremely costly. (And who would shoulder the costs? The consumers or the taxpayers? It definitely won’t be the shareholders if history is a guide).
Just for clarification:
The main idea for larger companies is that the benefits are more than the sum of its parts. Take apart non-essential parts, and they won’t survive on their own. Take apart essential parts, and you significantly damage the body.
(Of course there are movements to “unbuild” and go back to middle ages, or stone age civilization where everyone works on farms, but I am discounting that for this discussion).
That is why even EU is coming up with difficulties in their open fight against Google (which is more than a decade now). Although Google is not an EU company, they are more careful than “let’s break it down”.
And that does not mean, there are things Google does wrong, I could make a huge list here. Nor there are reasonable ways to spin off companies (see Niantic spinoff, which is currently doing the Pokemon Go for example, I wish they did the same to Stadia instead of shutting it down).
sukru,
I think before anything can get fixed we need to step back and remedy the underlying causes and unfair advantages that have created these monopolies and killed off competition in the first place. Otherwise it doesn’t matter how they get broken up. Those with unfair advantages will continue to monopolize the industry all over again. For starters, these billion & trillion dollar companies shouldn’t be allowed to pay lower tax rates than local companies. Also, let’s stop publicly funded subsidizes for these damn giants. It’s an irresponsible use of public dollars that does nothing but make the giants wealthier and stronger while seriously harming competition.
There are plenty of ways we can break apart their control on markets without necessarily breaking up the companies themselves. For example, when they try to forcefully restrict owners from using competing products/services or when they tax 3rd party transactions… outlaw that crap and don’t wait decades to do it either. If they’re using their dominant position to control markets rather than competing on merit, this needs to be quickly rectified. They should compete on merit like every other small business has to. If not using arm twisting tactics hurts their sales, well good, that’s as it should be. Of course they will whine about being forced to play with others on a level playing ground, but the public has no responsibility to give them money they didn’t deserve. I believe in meritocracy, but not the perversion of it that surrounds us today.
You speak as though things could only get worse for consumers without considering how these monopolies and oligopolies are already harming consumers and preventing us from reaching more optimal markets. Most of these corporate giants created something innovative along the way, which is commendable and should be rewarded. But all too often they enter a corporate mold where they just stop innovating. Innovation becomes secondary to their efforts to fortify their positions, locking out competitors, restricting consumers, and so on. We see this happening across the board: google/apple/microsoft/etc. This isn’t innovation and we shouldn’t be rewarding it. They’re good at making money off the same rehashed products year after year, but I don’t think many people would say this has produced innovation. For all the money these giants are raking in, they’re not producing much worthy innovation and if anything they’re harming innovation. So maybe it’s time for us to stop the train and get these old greedy giants out of the way of more innovative upstarts.
Alfman,
I see your heart is in the right place, and limiting the power of people is something we should aim for (and of course also limiting power of governments over people, but that is another discussion).
However that is done by minting more billionaires, not less.
Let me give an example,
For all his current shenanigans, Elon Musk used his money to disrupt two well established industries to get really good results, the automative and space travel.
In terms of automative, 100 year old companies were either slow in adoption of electric vehicles, or had very simple designs (Nissan Leaf), or worse entirely hostile: “Who Killed the Electric Car?” for the story of GM sabotaging their own popular model and laying off the design team, which later moved onto Tesla. (Don’t say there were government support, of course, but other companies had the same support, but sat on it).
Or aerospace, where we longer have to rent seats from the russians, nor have to pay “United Launch Alliance” exuberant fees for very late projects (it was mostly cost that killed the Space Shuttle, but of course terrible safety record did not help either).
That being said…
Tesla used their market power to do price manipulation last year. That significantly damaged competitors, even the larger ones like Ford that finally decided to build viable EV models (Mustang Mach-E, F-150 Lightning, …). In the extreme case it might have broken Lucid, which was not in a good place to start with. This is wrong.
Elon Musk personally decided to make policy decisions in the extreme example of wartime operations: https://www.reuters.com/world/europe/musk-says-he-refused-kyiv-request-use-starlink-attack-russia-2023-09-08/
Now, there are two things here.
First the government should be a counter-balance, true, they should have investigated the price movements of Tesla models in 2022-2023, before they would have such a negative effect on the market.
Second, even though the initial “disruption” was really useful, and Tesla continues to innovate in many areas, their corporate culture is not an example of how an American company should function. In addition to regular government-corporate relations, corporate governance itself, and employee representation is very important.
Bottom line: everything should be done in moderation, and extreme positions would be counter-productive.
Yes, they would. At least if history is any guide, reducing competition would not be productive.
Instead, we should focus on how to bring more platforms into viable levels. And that could very well be another large company investing in a new market for them).
And in this regard, I find EU regulators doing a much better job, than say US or UK for example. (My position was much different before).
Anyway, sorry for ranting again, circling back, I would be for more of a balanced approach, trying to steer away from extremes.
sukru,
Millionaires yes, but I cannot agree with you about billionaires (or soon to be trillionaires). There’s just way too abuse happening when individual wealth gets into the billions. The unfortunate reality is that less wealth is trickling down into the middle class pockets even as employees have gotten significantly more productive over the decades. Almost all of the economic gains went to those at the top. Sure, this stokes the billionaire lifestyles and pet projects, but they’ve ended up turning into kings living off the backs of the working class. It would be trivial to write such things off as harmless, but there are real macroeconomic consequences as a greater share of the pie gets siphoned into their their pockets. The rest of society faces higher burdens, struggling for access to education, facing unprecedented debt, high bills and unaffordable housing, medical expenses, child care, etc.
Unfortunately big oil has been holding us back decades, which is a huge topic unto itself. So I agree it’s good that new companies including Tesla have been able to break into the market. Although it’s worth mentioning that both Tesla and SpaceX have gotten billions in government funded subsidies.
https://www.businessinsider.com/elon-musk-list-government-subsidies-tesla-billions-spacex-solarcity-2021-12?op=1#spacex-lands-a-289-billion-contract-with-nasa-in-april-2021-1
Also, it’s an open question whether Tesla would have succeeded with or without Musk. He wasn’t an original founder.
Yes, the military industrial complex notoriously has lots of shady aspects. I do agree it is concerning that one businessman can control a country’s network infrastructure at the flip of a switch.
I don’t know why you are saying this because the dominant monopolies and duopolies we have today already have that exact effect. They are killing off competition, reducing innovation, and making us more dependent. People dislike intervention, but we have to face the troubling reality that market consolidation is will keep getting worse as these tech giants become more powerful. IMHO this is one of the lessons we must learn from late stage capitalism. Otherwise we will find ourselves creeping towards a new robber baron era where a few corporations own everything and competition is futile.
Alfman,
It is not only big oil, but any industry that had entrenched itself using government regulation is in the same criteria. Even “noble” ones like agriculture. Why do we continue to subsidize corn, when diet related issues is the number one driver of death in the United States for example?
Yes, I already mentioned that subsidies were in actions. But they were also available to competitors, which were either not used, or misused. And we can easily claim the goal of these subsidies were met.
There is no “unaffordable” housing crisis. There is a housing crisis, period.
https://usafacts.org/articles/population-growth-has-outpaced-home-construction-for-20-years/
I always say housing is a “game of musical chairs”. We continue to introduce new players, but not enough chairs for all. (And we’d hear 100 different NIMBY reasons why we can’t build a new apartment block, while they were able to cut down forests for suburbs).
Anyway, another topic…
Yes, true. That is why I am all for opening up competition to new startups, hence “minting new billionaires”
Trickling down is a loaded political keyword, but here it actually happens.
The way billionaires “cash out” is designed to be productive (US ones, that have been granted that value though entrepreneurship). In order for example Elon Musk to cash out from PayPal
1) The company needs to find new investors and more people to share control. Better yet IPO meaning public ownership
2) They pay a sizable amount of cash in taxes. (Don’t know how much he did for PayPal, but for buying Twitter he had to pay something like $13 billion, which is probably the personal tax record)
And then they can use it in different ways, some better than others.
1) “Unproductive”. I don’t care about Bezos buying a yacht, or Larry Page retiring to his private island. That money is now being spent in the tourism industry essentially, and a net wash.
2) “Productive”. Elon Musk (again) for example investing in Tesla and SpaceX, and then using it all up, almost going bankrupt. We need crazy people with resources to fund those project. (No, the government unfortunately could not do it even with subsidies).
3) “Destructive”, like buying politicians, intimidating regulators, mass media disinformation campaigns, directly writing laws and regulations that effect themselves, and so on. You already know the idea.
Personally, I am all for keeping the path of PayPal -> Tesla, or even Google -> Android/YouTube path open (the second one is a corporation using their money to prop up a startup).
My concern is when they abuse it, like buying a competitor and shutting it down (General Motors, look up “San Francisco Streetcar Conspiracy”), damaging the environment, on purpose, and lying about it (all the tobacco companies, oil companies, and so on).
The distinction is a thin line though. Sometimes it goes the other way around (government harassing the companies by abusing power), like asking for encryption keys and mass user data, and at that point companies using their billions to fight back (even for selfish reasons) should probably be acceptable.
Anyway, I should not write this long at late night…
sukru,
IMHO big oil were the primary culprits holding back innovation on the automobile front, though honestly I don’t particularly feel like opening up this can of worms right now.
We can call it something else if you prefer, but for me there’s no doubt many parts of the country are presently suffering from a housing affordability crisis. You propose the solution of building more housing, which is a logical and obvious thing to do, but it does have complications. Many cities and suburbs don’t have more property to build on even if they wanted to. Other cities that do are in places where people don’t want to live because there’s not enough work. Cities like NYC have a different conundrum to solve, the vacancy rate has remained high as people have moved out in droves in favor of remote work, yet housing and rental costs continue to rise anyways.
https://www.thecity.nyc/2022/5/17/23108792/nyc-apartment-vacancy-rate-housing-emergency
They discussed this topic recently on NPR and it’s ongoing impact on affordability. They say the affordability would be/will be even worse as businesses require employees to return to the office. While many factors are in play another part of the problem is that properties are being bought by wealthy individuals and investment firms who treat properties like stocks rather than housing they intend to occupy. Meanwhile the working class are totally prices out of even entry level properties, it’s just too expensive. How do you solve problems like this that are rooted at least partially in systemic wealth inequality? Granting permits to build new houses attracts more development, but developers in cities like NYC have no incentive to target the poor/working classes. The government has tried to mandate developers dedicate a portion of new housing projects to more affordable housing, but it’s not even close to being enough. I don’t have an answer, I just know that many, especially young generations, are suffering from the current housing affordability crisis.
I still think that it would be better to promote policies that do more good for more people with a far less skewed distribution to reduce inequality. Creating a million millionaires would create way more opportunity and do more good than creating a thousand billionaires.
Trickle down is a lie. Many politicians have sold the idea that trickle down would help the working classes, but time and time again the evidence has been clear that trickle down doesn’t help the masses and it never has. Making it easier for the rich to make money simply makes them richer. Trickle down policies give a larger share of the pie to a very small subset of population at the top at the expense of everyone else.
Well, just to clear that I’m against both abusive corporations as well as abusive government. In both cases too much unchecked power is bad and IMHO both need to be accountable to the people. in practice I’d say both have grown way too big to the point where they are now controlling us, which I am against.
Haha, same.
I really don’t think that FaceBook and Apple are comparable to Microsoft and Amazon here, because to my best knowledge they don’t hold a monopoly on Government Contracts protected by incompatible, proprietary format barriers.
FaceBook and Apple maybe a case for the ministry of health (like in mental health) but to my best knowledge their practice is not unfair.
Although Microsoft and Amazon gain their dominance largely from Tax payers’ funds without returning control over the products to the Tax payers. That’s a huge mistake and imbalance in my opinion and needed be addressed.
Any Software or IT service to the public, funded by tax payers should be open and transparent.
Andreas Reichel,
+1 I agree. FOSS mandates on government spending makes a lot of sense! That we’re paying over and over again for the same proprietary software every year and not even be able to use is a poor use of public tax dollars.. FOSS developers could really use those tax dollars and the public should be able to use the open software in return for their payments unlike with proprietary software.
Unfortunately though most politicians are in bed with the big businesses funding their campaigns. It’s corrupt but by scratching each other’s backs they can mutually help each other stay in power.
@Thom: This section is broken!
1) sends a comment instead of breaking a new line. Then there is no way to correct it after.
2) Why do I always have to re-confirm when I want to send a 2nd comment?
CTRL ENTER sends a comment instead of breaking a new line.
LT; and GT; are also silently filtered out. argh!
Andreas Reichel
Yes, you are right. These happened b/c a wordpress update broke some plugins. Not sure if these will get fixed or not.
Can you use enter or shift-enter?
The comments are using html tags. So for the greater and less than symbol < > you can type < and >. (Hopefully I typed this right because I won’t be able to edit). I agree it’s kind of annoying, but it’s standard wordpress.
Andreas Reichel,
Apple are dominant at least in the US mobile market and they sought to restrict owners from installing competing app stores. Also they’ve been engineering hardware to make it impossible for 3rd parties to fix even when the 3rd parties are using legitimate apple parts. This has been reported previously by many sources, here are examples.
“New Anti-Consumer MacBook Pros – Teardown And Repair Assessment – Apple Silicon M1/M2”
https://www.youtube.com/watch?v=r0Hwb5xvBn8
“Apple Should Copy Valve!”
https://www.youtube.com/watch?v=o1MOHS48jRY
3rd party repair shops including the Rossman repair group have been embarrassing apple by shining a light on their unfair practices. Rather than improve their own training to be able to match the competition on merit, apple has systematically responded to the competition by making sure 3rd party repairs get locked out even when using authentic parts, They’ve literally added bugs to the OS to make it appear as though the 3rd party repairs were done incorrectly when in fact apple’s software is keeping the device broken. Whether one is a fan of apple or not, there’s no other way to put it, many of their actions have been extremely hostile and anti-competitive.